Which of the following statements is true of government spending?
a. An increase in government spending raises the equilibrium level of income by a multiple of the original spending increase.
b. Government spending is a part of monetary policy, not fiscal policy.
c. A decline in government spending brings about an expansion in the economy.
d. An increase in government spending increases the recessionary gap in the economy.
e. An increase in government spending shifts the aggregate demand curve downward by a fraction of the rise in government spending.
a
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If the reserve requirement is 20 percent and the Fed buys $10,000 worth of Treasury bonds, what is the change in the banks' total reserves?
A) $2,000 B) $20,000 C) $8,000 D) $100,000 E) $10,000
Credit cards are
A) money but are not a large part of the money supply. B) not money. C) money and are the largest part of the money supply. D) not money because they are not made of paper.
Should there be an official definition of a depression? If so, how should it be defined?
What will be an ideal response?
Consider an auctioneer who is selling an item through an auction. It is known that the 10 risk-neutral bidders have independent private values that are uniformly distributed between $1,000 and $2,000. Based on this information, we can conclude that the expected revenue in this auction will be:
A. $2,000. B. $1,000. C. $1,900. D. There is insufficient information to determine the expected revenue.